Attard v James Legal Pty Ltd

The appeal in *Attard v James Legal Pty Ltd* concerned a dispute over legal costs and alleged negligence. The appellants, the cross-defendants, sought to challenge the quantum of costs claimed by the respondents, the cross-claimants, and argued that the primary judge had erred in refusing to refer the assessment of these costs to a referee. The appellants also contended that the respondents, as their solicitors, had been negligent in their conduct of the defence to a cross-claim, particularly in failing to advise that the cross-claim was stayed unless and until the Court granted leave to proceed. The appeal was heard by Beazley, Giles, and Tobias JJA in the Court of Appeal of New South Wales.

The central legal issues before the Court of Appeal were whether the primary judge should have exercised discretion under UCPR 20.14 to refer the assessment of the respondents' costs to a referee, and whether the respondents had breached their duty of care or the terms of their retainer by failing to advise the appellants about the stay of the cross-claim and the need for leave to proceed. The court also considered whether the respondents' conduct caused the appellants loss, and if so, whether the primary judge erred in refusing to assess the probabilities of a hypothetical application for leave to proceed under s 444E(3) of the *Corporations Act*. The question of advocates' immunity and its extension to instructing solicitors was also relevant to the alleged negligence.

The Court of Appeal allowed the appeal in part, finding that the primary judge should have referred the quantum of costs claimed by the respondents to a referee experienced in legal costs assessment pursuant to UCPR 20.14. The court reasoned that such a reference was appropriate to ensure the fairness and reasonableness of the costs claimed. While the court did not set aside the primary judge's findings regarding the retainer and the alleged negligence, it did vary the orders concerning the costs. The court ordered that the appellants pay 60% of the costs claimed by the respondents within 28 days, subject to the outcome of the reference. The costs of the reference were reserved to the trial judge. The court also ordered that the appellants pay 75% of the respondents' costs of the appeal.